How free content has damaged the content industry: October 22, 2001 issue of New Thinking

October 22, 2001 New Thinking:
How free content has damaged the content industry

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October 22, 2001

How free content has damaged the content industry

By Gerry McGovern

A recent report from Forrester Research states that people who use the Internet are reluctant to pay for content. However, a previous report by Forrester found that a majority of people thought that the quality of the content on the Internet was poor. People want quality content but they don’t want to pay for it. But that is a circle that cannot be squared.

In understanding content on the Internet we need to recognize that there are two distinct types. First, there is content provided by traditional publishers whose very business model depends on generating revenue from this content. This they do through advertising revenue and/or subscription fees.

The second type of content is that which supports an organization, either through helping to sell more products and/or enhance the brand of the organization. This is the most common type of content available online. The revenue that such content creates is indirect, and thus the publication of such content is not affected by an unwillingness of people to pay.

However, the pervasive ‘content should be free’ attitude is undermining the very nature of content itself. Because content is being constantly associated with being free, a sense of content being cheap to publish, content being of little real value, is growing within business and society.

The whole Napster saga very well illustrated this sort of undermining of the value of content. People who illegally swapped music files quickly claimed that it was their right. They claimed that the music industry was corrupt and that that made it okay for them to steal. Music groups who tried to prevent the stealing of their music were branded as greedy and anti-fan. Suddenly, music was meant to be free.

As anyone who has ever been involved with content knows, creating quality content is a very expensive and time-consuming process. Content is never free to create and publish. The reasons why so much content has been free on the Internet up until now are as follows:

Content is been used to sell products or enhance the brand of organizations.
Internet content publishers applied an unworkable business model which predicted that advertising alone would support a content business. The gaping hole in such business models did not become obvious until the venture capital money ran out.
Many online content businesses were heavily subsidized by content and other resources from an offline content business.
Online subscription models have been difficult to implement. Pay-as-you-read models are not available because digital cash never arrived.

A product or service is only worth what someone is willing to pay for it. Right now, people are fixed on the idea that Internet content should be free. We are thus caught in a vicious circle. As long as people are not willing to pay, there will be a continuous decline in the quality of much content that is found on the Internet.

At some point, perhaps two years from now, a bottom will be found. More and more quality content resources will have either closed down or gone to a subscription model. Enough people will get sick of wasting time clicking their way through oceans of free, mainly poor quality content.

It has to happen. Quality is quality and quality costs.

Gerry McGovern

Next issue: The technology productivity paradox
Previous issue: The create once publish everywhere myth
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As long as people are not willing to pay, there will be a continuous decline in the quality of much content that is found on the Internet.

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